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The paradigm of business structures 30 years ago, a bureaucracy has the following characteristics: highly specialized operating tasks, formalized rules and regulations, tasks grouped into functional departments, centralized authority, narrow spans of control, and chain-of-command decision making. This structure expedites the efficient performance of standardized activities. Furthermore, rules and regulations allow bureaucracies to substitute less-talented (less-costly) managers for creative, experienced decision makers. This structure does have several drawbacks. Specialization can create jurisdictional disputes or “turf-wars” as functional unit goals override the goals of the organization. Plus, bureaucrats resist change and avoid outcome accountability. Given environmental volatility, however, many bureaucracies have become less rigid and more entrepreneurial through decentralizing decision making, designing work around teams, and developing strategic alliances. The matrix structure assigns functional specialists to interdisciplinary teams that are supervised by project leaders. This structure combines product departmentalization and functional departmentalization. Because workers in the matrix have two bosses—their functional department managers and their product managers—the matrix breaks the unity-of-command concept. The matrix has strong points: it facilitates coordination between multiple projects that are complex and interdependent, and it efficiently allocates specialists. The matrix also has several weaknesses: it can create confusion, foster power struggles, and increase employee stress. So, the matrix has met with mixed success. Management can focus its coordination efforts by using a team structure. A team structure breaks down departmental barriers, flattens the organization, decentralizes decision making, empowers employees, promotes accountability, and requires employees to be generalists as well as specialists. In smaller companies, the team
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